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Oil-for-electricity deal between Sudan, Ethiopia could be a regional boon: report

June 9, 2011 (KHARTOUM) – Sudan’s north-south halves and Ethiopia will benefit greatly from striking a deal to exchange the former’s oil with the latter’s electricity, a new study has argued.

Ethiopia-jpg.jpgHorn of Africa’s leading powers, Sudan, an independent south Sudan and Ethiopia, face remarkably similar challenges in terms of core–periphery inequalities, food and energy production, climate change and poor infrastructure, says the London-based think-tank Chatham House in a paper released this month.

A history of mutual mistrust and lack of regional integration around oil, water and hydropower between the three neighbors will make it harder to address these challenges, and may even lead to conflicts, the paper goes on to say.

Sudan, sub-Saharan Africa’s third-largest oil producer, behind Nigeria and Angola, is currently producing between 470,000 to 480,000 bpd.

Over 70 percent of that figure is due to be assumed by South Sudan when it officially splits from the north in July 2011.

North Sudan, which depends on oil revenues for some 45 percent of its budget, is scrambling to find other sources of income to make up for the loss of billions of dollars expected to be incurred as a result of south Sudan secession.

Sudan feeds 80 percent of Ethiopia’s oil demand, according to Sudan’s Nile Petroleum Company (NPC).

But Horn of Africa’s most populous country, Ethiopia, is a leading producer of hydropower, with the potential to generate up to 45,000 megawatts of electricity.

Chatham House’s paper, titled “Black Gold for Blue Gold? Sudan’s Oil, Ethiopia’s Water and Regional Integration”, suggests that north, south Sudan and Ethiopia have the choice of sharing resource wealth to build better economic relations that lock in political stability and address the ecological pressures confronting their populations.

North and South Sudan can continue to supply Ethiopia with oil whereas the latter could use its substantial hydropower potential to export electricity to its neighbors, the paper recommended, arguing that such cooperation would contribute to sustainable regional development and might lead to wider reductions in tensions in the region.

It further proposes that the regional integration between the three countries can be built on a revision of the 1959 Nile Treaty and the synergies between Sudan’s oil for Ethiopia’s water.

However, the paper acknowledges the existence of fundamental obstacles to regional cooperation on energy.

It summarizes these obstacles in north and south Sudan’s “greater focus on building a new relationship with each other than on broader regional cooperation; North Sudan’s insistence on pushing ahead with its own dam programme; and internal factors in Ethiopia constraining its emergence as a regional leader.

(ST)

3 Comments

  • Land-of-Cush
    Land-of-Cush

    Oil-for-electricity deal between Sudan, Ethiopia could be a regional boon: report
    It is too early for south Sudan to make any agreement on its oil share with it neighbouring countries. Particular north Sudan and Ethiopia…
    But conditionally south Sudan has now and will share it oil with north Sudan country. Because there was no enough agreement and signatory on paper as evident; that why north is now have right to excises it madness on oil while suspending “Goods” to flown to south Sudan.
    If Ethiopia need and ready to have relationship with south Sudan then they should do it separately instead to do it in connection to north Sudan.

    Reply
  • Wanibuluk Ciciliba
    Wanibuluk Ciciliba

    Oil-for-electricity deal between Sudan, Ethiopia could be a regional boon: report
    Osh! It realy sounds a great deel to secure but listen here, we all know that” a person who likes throwing stone can not live in a glass house” and also if North Sudan and the South Sudan are put in the same pot, they will break it. so if ‘what an elderly man see while seated is not what a young man sees while standing’what do we envisage here, if the deel lies between Adis and Juba that is attainable but involving Khartoum is like a Tod jumpling in a clean water.
    Khartoum and Juba can right now pretend to agree on an issue but within a little while they disorganise themselves.
    But what if South Sudan finds where to establish a hydro power posibilly on the Nile river whill Egypt make alerm, coz this water passes here and we can make use of it as well in any way we deem so.
    I appreciate the deel incase it materializes but who will make a follow up in the deel, we have old men and women who are surving in the offices unable to stand up and follow issues of importance just because they fought in the war, I just wonder if that is the only way to compensate them any way.
    Let the fight for the deel continue, this current power supplies can’t even run any scheme and its not sufficient for the Nation.

    Reply
  • henok
    henok

    Oil-for-electricity deal between Sudan, Ethiopia could be a regional boon: report
    What is this pre-condition and “if you want this…..then you have to first do this” premise mr. Cush? Only when your independence is made official in the coming month, Ethiopia will talk to the South Sudan brothers directly.

    Reply
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